Is your client acting as a de facto director?

The telltale signs to watch out for.

As a trusted advisor, you can play a critical role in informing your clients about their obligations under the Corporations Act 2001 (Cth). One area often overlooked is the potential for a client to be deemed a de facto director, even if they have not been formally appointed.

In a file which is currently being handled by our Brisbane office, ASIC (Australian Securities and Investments Commission) has provided funding for Public Examinations to be conducted of the registered director of a company as well as several of their family members who were involved in the operation of the business to determine whether they could be considered de facto directors. While that matter is ongoing, it has highlighted the potential serious legal and financial consequences, particularly in insolvency scenarios, that an individual can face if they assume the duties and responsibilities of a director without holding the title.